Another advantage is the fact that the business has one of the best amounts of products on the globe that produces annually 11. 000 and its key rivals 2000-4000. "The company keep low inventory in stock because each new product is meant to be sold within 10 days, if not is replaced after 14 days. By this measure the company keeps low priced of inventory. Every store in Spain is supposed to be went to on average 3 times per annum, but Zara 17 times"(according to article Zara a Spanish Success Account, CNN, 15 June 2001).
Also this season the business will enter Australian market. "The company has a key concept in information technology to aid its international logistics system and online advertising where return and exchange is the same as the store system"(Wikipedia). Also in a few location people can purchase Zara products by Ipod touch, I Phone software. "Zara model have significantly more flexibility in development sales, and stock management and its store's managers article again every day to designers in La Coruna for offers which shows a good coordination between departments to be able to meet costumer's needs"(Zara website).
"Zara is part of Spanish group Inditex is extended worldwide in 77 countries with 5000 stores. Net Income was increased by 42% for the first 9 a few months of 2010 and share price 57. 60 euro" (Inditex Group). The business has Strong romantic relationship between wholesalers, stores, management and costumers. Also, the use of the highest quality of materials for clothing. " Zara income for 2009 was 7. 071 billion Euros and operating profit is 15% greater than H&M and GAP, but working capital is the lowest"(Wikipedia).
Zara is one of the largest clothing retailers on the planet and this can cause its weakness in different elements of business, and it is too difficult to control. " The company is global but has presence in 77 countries" (Wikipedia). Also "Zara's very best advantage is situated in its potential to provide the most interesting cutting-edge items, without risk. Normally the more cutting edge the design, the greatest the chance. Clothes do not always previous long" (Zara 2. 0- Fashion index. com). Zara has a reputation for new design product development and imagination, but is the risk that their development may stumble in future. Costs of doing business with Albanian stores, as the Zara is found in La Coruna Spain. Although ZARA has a successful business design it also have some weaknesses that could limit its scalability and ambitious development.
"ZARA constitutes around 80% of Inditex business (8 companies) this means a failure in ZARA can put the complete group at a risk" (Inditex group).
Advertisement is now an important part of the business and it reflects right to the sales. "Zara's in-store ad model might not exactly work going forward" (Zara). Another weakness for the company in Albanian market is that, the majority of people are low income and could be problematic for the Zara to keep carefully the growth.
"Merge with Inditex group has generated more possibilities to invest in emerging markets" (Wikipedia).
"Zara stores are positioned in 77 countries and are lot of opportunities to invest and expanding the marketplace as with India and China" (Inditex). Albania is a good opportunity for the company to open stores because people like high fashion brands. New location and stores offer the company opportunities to exploit market development.
Grow into new market segments/consumer segments Albanian Consumer Taste
Albanian consumer view ZARA as popular house. If ZARA must grow in Albanian it needs to address specifically the Albanian needs and perception of fashion.
The biggest hazards are its opponents as H&M, Distance and Benetton and new entries in market that want to recapitalize their gains in new market segments as Albanian. Increasing creation cost because of labor and raw materials. As economic turmoil is striking back costumers are trended to invest less.
Imitation of company's logo design by people that don't have permission to utilize it.
- Increase in Euro Rate
An increase in Euro rate will increase the consumer selling price, consequently Zara will eventually lose price benefit against relative competitors outsourcing in Albanian lek.
Zara sales are increasing 25% over the past 5 years it is becoming one of the world's speediest growing retailers, and also to keep this expansion has to invest in emerging market segments.
"Zara strategy is growth through diversification with both horizontal and vertical integration, and brings new fashion" (Zara website). The business controls all circulation programs, and invests a whole lot in Real estate industry to be able to buy primary locations for new stores. This risk for Zara because its world wide web cash flow is significantly less than its challengers.
"Although ZARA has an effective business design it also has some weaknesses which could limit its ambitious progress, Inditex over reliance on ZARA" (Wikipedia)
Zara's business design is situated by getting new designs models in market every fourteen days. For countries like Albania, where people are less fashion frontward, it could be an issue for Zara to sustain its occurrence. Other hazard for the business in Albania is the politic stableness that continues to be delicate because of disagreements between two main politics makes. Petrol prices are incredibly expensive in comparison to other countries and will affect the cost of products by increasing their prices.
Situational Research (TOWS)
Weaknesses and Dangers (WTH)
"The weaknesses of Zara is usually to be part of Inditex group which has 8 companies and means failure of one of them can put Zara at a risk too"(Inditex group). The company must find a strategy in order to beat weaknesses and developed them into strengths. As you may see from the graph the course shows the power- opportunity position (so). The strategy is to lessen the competitive danger by growing in market adaptable new designs to be able to meet costumer's preferences on time.
Weaknesses Opportunities (WO)
Another weakness of Zara is increasing development costs in Spain and Portugal with launch of Euro in 2002. Products became more expensive for export. To defeat this Zara started to invest globally and new mergers in order to keep prices down as its challengers. If Zara enters in Albanian marketplaces, it generally does not have experience with Albanian laws and their culture for clothing but could beat those barriers by creating franchise with local companions.
Strengths Threats (ST)
One of the best risks to Zara is the carrying on an appreciation of the Euro against other currencies this implies higher prices for the buyer and less competitive posture. To reduce hazards of competition and exchange rate Zara has built factories in North Africa and emerging markets. Economic crisis that started in 2008 but still goes on has obliged costumers to invest less on clothing items, and the business must bring new designs with affordable prices in order to handle this example.
Zara marketing strategy for Albanian market includes the utilization of targeted printing advertising advertising and immediate selling to Tirana and Durres area. The company will also use an online site to keep costumers touching new designs also to sell products online. To become successful as a fresh Zara store in Albanian market we have to beef up our relationship with corporate headquarters. Also we have to put our franchise in position to provide the highest quality of clothing in Albania market by getting new brand and new designs. Our online marketing strategy is to connect this to our customers and to create a good romantic relationship with them.
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